• Latest
  • Trending
  • All

Could Rachel Reeves’ new reforms boost growth?

February 2, 2025

Burnham had two hospitality dinners with Man City chairman, deleted records show

October 15, 2026

Anthropic flags revenue surge to investors ahead of stock market debut

October 15, 2026

Sussex time capsule celebrates 100 years of Winnie-the-Pooh

October 15, 2026

Netflix to shed 1,000 jobs in steepest cuts since 2022

October 14, 2026

US inflation rises more than expected – here’s what is happening with prices

October 14, 2026

Watch: Can the Fort Hood shooter’s execution be livestreamed?

October 14, 2026

Starlink: Musk says US government may be behind slowdown of Ukraine drone speeds

October 14, 2026

We are behind you and that will not change, PM tells Zelensky

October 14, 2026

Raye hits back at ticket touts who took over Albert Hall sign-up

October 14, 2026

Swimmer Archie Goodburn thanks prime minister as brain cancer review announced

October 14, 2026

Ji-sung Eom racist abuse: Millwall boss Alex Neil criticised for stoppage comments

October 14, 2026

Waterford: Vigil held after murder of four family members

October 14, 2026
News
  • Login
  • Home
  • News
  • Sports
  • Worklife
  • Travel
  • Reel
  • Future
  • More
Thursday, October 15, 2026
No Result
View All Result

NEWS

3 °c
London
8 ° Wed
9 ° Thu
11 ° Fri
13 ° Sat
  • Home
  • Video
  • World
    • All
    • Africa
    • Asia
    • Australia
    • Europe
    • Latin America
    • Middle East
    • US & Canada

    Sydney teen charged with murder of boy who was shot in face

    Republic of Ireland: Public sector strike begins

    Mauritius reels from worst riots in decades after woman shot by police

    Australia’s first Michelin stars awarded to 11 restaurants

    Germany puts Ukrainian on trial accused of blowing up Nord Stream pipelines

    Argentina targets UK in legal claim over Falklands oil exploration

    Houthi missile hits Aramco building after Saudi-led coalition hits Yemen fuel depot

    Pope diagnosed with lung cancer but had successful surgery, Vatican says

    Qantas flight grounded after bedbug outbreak

  • UK
    • All
    • England
    • N. Ireland
    • Politics
    • Scotland
    • Wales

    Burnham had two hospitality dinners with Man City chairman, deleted records show

    Sussex time capsule celebrates 100 years of Winnie-the-Pooh

    We are behind you and that will not change, PM tells Zelensky

    Swimmer Archie Goodburn thanks prime minister as brain cancer review announced

    Ji-sung Eom racist abuse: Millwall boss Alex Neil criticised for stoppage comments

    Waterford: Vigil held after murder of four family members

    Zelensky and Burnham to meet in Downing Street

    Family pays tribute to ‘warm and engaging’ man killed in tiger attack

    Man killed in tiger attack identified as William Chapman

  • Business
    • All
    • Companies
    • Connected World
    • Economy
    • Entrepreneurship
    • Global Trade
    • Technology of Business

    Netflix to shed 1,000 jobs in steepest cuts since 2022

    US inflation rises more than expected – here’s what is happening with prices

    Shropshire heating oil users face tough choices as prices rise

    Poundland in rescue talks as owners seek buyer

    Three things we’ve learnt about the UK economy from the IMF

    Cost-of-living struggles inspire new supermarket in Newcastle-under-Lyme

    Lego fraudster among last year’s most high-profile insurance scammers

    Healey faces £35bn Budget challenge to meet spending pledges, says think tank

    Rural West communities struggle as price of heating oil rises

  • Tech
  • Entertainment & Arts

    Meghan hits red carpet at Power of Women in Hollywood

    Margot Robbie unable to speak at Saltburn premiere

    Barbra Streisand: Siri can now pronounce my name

    Wes Anderson’s The Grand Budapest Hotel inspires cinema’s look

    Taylor Swift/ Travis Kelce romance reaches White House

    The Killers booed at Georgia concert after inviting Russian fan on stage

    Watch: Memorable moments from Parkinson's star-studded show

    Tom Jones: Neighbour surprised to find singer in flat below

    Black Country Folk Festival showcases local musicians

    Watch: Australians set new world record with Tina Turner dance

  • Science
  • Health
  • In Pictures
  • Reality Check
  • Have your say
  • More
    • Newsbeat
    • Long Reads

NEWS

No Result
View All Result
Home Reality Check

Could Rachel Reeves’ new reforms boost growth?

February 2, 2025
in Reality Check
10 min read
236 18
0
493
SHARES
1.4k
VIEWS
Share on FacebookShare on Twitter


Getty Images Rachel Reeves speaks at a news conference. She is wearing a dark jacket and is standing side on to the camera. In the background, a large machine can be seen. Getty Images

Chancellor Rachel Reeves said on Wednesday that “economic growth is the number one mission of this government” as she unveiled a series of proposals to boost the UK’s economy.

But how quickly could the government get growth from the plans she announced?

Critics have argued some of the projects – such as expanding Heathrow – would not help in the near term.

BBC Verify has examined some of the key numbers and claims.

How slow is the UK’s growth?

The most recent official data shows there was virtually no growth in GDP – the overall size of the UK economy – between the July 2024 election and November 2024.

A BBC graphic showing UK economic growth since July 2022.

And the latest medium term official growth forecast from the Office for Budget Responsiblity, the government’s official forecaster, is for 1.6% GDP growth in 2029, which would be well below the pre-2008 financial crisis average growth of 2.8% a year.

However, the International Monetary Fund has forecast that the UK’s growth rate for 2025 and 2026 will be higher than in France and Germany.

Lower rates of GDP growth would translate into slower growth in our wages and incomes and general living standards.

Heathrow expansion

The chancellor said that allowing Heathrow to build a third runway would “create 100,000 jobs”, boost investment and exports and “unlock futher growth”.

She cited a new report by the consultancy Frontier Economics which found it could increase the UK’s potential GDP by 2050 by 0.43%, around £17bn.

That is broadly in line with the findings of an independent commission by Sir Howard Davies in 2015, which concluded a third runway at Heathrow would support UK trade and enhance productivity and push up GDP by 0.65-0.75% by 2050 relative to otherwise.

However, most analysts believe it would likely take many years before shovels went into the ground to start building a new runway, even with new reforms to speed up the planning process.

And the government will have a difficult balancing act to both expand Heathrow and meet its climate goals.

BBC Verify asked the Treasury for its source for the 100,000 jobs figure and it pointed to a 2017 report by the Department for Transport estimating that a new runway at Heathrow could add between 57,000 and 114,000 additional local jobs. Though that report added that “these jobs are not additional at the national level, as some jobs may have been displaced from other airports or other sectors.”

Oxford-Cambridge Growth Corridor

The chancellor in her speech claimed an Oxford and Cambridge Growth Corridor “could add up to £78bn to the UK economy by 2035”.

This corridor is a resurrection of the previous government’s plans to join Oxford and Cambridge with new transport links and allow those two university and research hubs to expand.

In support of the chancellor’s figure, the Treasury has cited research by an industry group called the Oxford-Cambridge Supercluster.

This research shows that this £78bn is a “cumulative figure” over 10 years, not the boost in a given year.

The analysis suggests the project could add £25bn in Gross Value Added (GVA) a year to the UK economy by 2035.

That would constitute roughly a permanent 1% boost to UK GDP by that date.

EPA Prime Minister Sir Keir Starmer leaves 10 Downing Street. The black door with 10 on it can be seen in the background as Sir Keir walks away. He is wearing a dark suit and glasses and is holding a binder. EPA

Prime Minister Sir Keir Starmer has said that growth is “the defining mission” of his government

Estimates of the impacts of an infrastructure project on growth are inherently uncertain and very sensitive to the assumptions of researchers about what would have happened to growth if it had never been built.

Yet most economists do believe infrastructure projects, especially those that allow already productive places to expand, will ultimately help the UK economy grow more rapidly than otherwise.

Ben Caswell, a senior economist at The National Institute of Economic and Social Research (Niesr), said: “Big infrastructure projects typically deliver growth over the long term, approximately 10 to 20 years.”

“There may be a small demand side boost in the short term when shovels are in the ground, but nothing so significant that you would see it in headline GDP growth figures.

“However, after the project is complete, the supply capacity of the economy is permanently enhanced, and, all other things equal, that delivers higher sustained GDP growth than would have otherwise been.”

Pensions reform

Another reform the chancellor says will be pro-growth is enabling UK companies to access the funds from their “defined benefit pension” pots, held on behalf of their workforces to fund their retirement.

Defined benefit pension schemes guarantee an annual pension payment to retired workers, based on their salary while they were in work.

Many of these defined benefit pension pots have moved into surplus in recent years due to the rise in interest rates since the pandemic, meaning their financial assets (their investments) are greater than their financial liabilities (what they have to pay out to pensioners).

The Treasury has said that approximately 75% of schemes are now in surplus and that the total surplus adds up to £160bn.

The chancellor wants to legislate to allow the firms to use these funds to invest, while keeping safeguards to protect and guarantee workers’ pension pay-outs.

Measuring the size of the surplus of defined benefit scheme depends on various complex assumptions about the scheme and its relationship to the employer.

The official Pension Regulator estimates that on one measurement the size in September 2024 was £207bn, but £137bn on a different measurement.

The Treasury’s estimate is roughly midway between the two.

If such sums were deployed that could, in theory, make a positive difference to overall UK business investment, which is regarded by economists as both a short term and a long term driver of GDP growth.

Total business investment in 2023, according to official data, was £258bn.

But the size of any boost from this pension reform would depend on companies being willing to invest their surpluses, which is subject to great uncertainty as many firms have been looking to offload their defined benefit pension schemes to insurance companies in recent years.

BBC Verify logo
Thin, red banner promoting the Politics Essential newsletter with text saying, “Get the latest political analysis and big moments, delivered straight to your inbox every weekday”. There is also an image of the Houses of Parliament.



Source link

Tags: boostgrowthRachelReevesreforms

Related Posts

Watch: Can the Fort Hood shooter’s execution be livestreamed?

October 14, 2026
0

The US Department of Defense says they plan to livestream the execution by firing squad of Nidal Hasan, who...

Is Zelensky right to say data centre strikes have taken down Russian bots?

October 13, 2026
0

Claims that Ukrainian strikes on Russian data centres reduced Kremlin-linked bot networks have spread widely online, but experts have...

Which war is having the biggest impact on diesel prices – Iran or Ukraine?

October 12, 2026
0

As well as being a major exporter of crude oil, the Middle East is also a significant global hub...

  • Lee McGregor: Scot seeks world title in 2025 & Nathaniel Collins bout

    680 shares
    Share 272 Tweet 170
  • Belgian footballer arrested in cocaine investigation

    535 shares
    Share 214 Tweet 134
  • Next to raise prices to help pay for rising wage costs

    534 shares
    Share 214 Tweet 134
  • South Wales Police officers injured, one arrested

    526 shares
    Share 210 Tweet 132
  • ‘It stirred the people to breathless wonder and scalding abuse’: The tumultuous history of the Sydney Opera House

    521 shares
    Share 208 Tweet 130
  • Trending
  • Comments
  • Latest

Lee McGregor: Scot seeks world title in 2025 & Nathaniel Collins bout

January 16, 2025

Belgian footballer arrested in cocaine investigation

January 27, 2025

Next to raise prices to help pay for rising wage costs

January 7, 2025

World Cup 2022: TikTok brings football fever to millions of fans

0

UK economy will get worse before it gets better, warns chancellor

0

One of Central America’s most active volcanoes erupts again

0

Burnham had two hospitality dinners with Man City chairman, deleted records show

October 15, 2026

Anthropic flags revenue surge to investors ahead of stock market debut

October 15, 2026

Sussex time capsule celebrates 100 years of Winnie-the-Pooh

October 15, 2026

Categories

Politics

Burnham had two hospitality dinners with Man City chairman, deleted records show

October 15, 2026
0

On Monday, the GMCA released a statement about Burnham's meetings with Man City in his role as mayor for...

Read more

Anthropic flags revenue surge to investors ahead of stock market debut

October 15, 2026
News

© 2023 GODJ - NEWS CORP - news.godj.com.

Explore NEWS.GODJ.COM

  • Home
  • News
  • Sports
  • Worklife
  • Travel
  • Reel
  • Future
  • More

Follow Us

  • Home Main
  • Video
  • World
  • Top News
  • Business
  • Sport
  • Tech
  • UK
  • In Pictures
  • Health
  • Reality Check
  • Science
  • Entertainment & Arts
  • Login

© 2023 GODJ - NEWS CORP - news.godj.com.

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.